It's Still the Economy
/
“We are consuming over 5 million barrels less in oil a day than had been predicted in 2003. So, there is no question we are making dramatic strides in the oil sector, but we are doing twice as well on the conservation side of the ledger than we are in production.”
It's important to remember how often people forget to mention the economy as a key factor is US Oil Consumption. On the right, they point to decreasing oil imports and pretend that it's all due to domestic production. On the left, they point to decreasing domestic consumption and pretend it's all due to increased efficiency and fuel standards, as Sen. Menendez did in his recent guest post for Climate Progress.
In both cases, they don't mention the largest factor contributing to both trends: the sad state of the US economy that has persisted for years. If you could magically transport the booming economy of the '90s and paste it onto modern times, both US oil demand, and US oil imports would look dramatically different.
This isn't to say that efficiency gains and fuel economy standards aren't important, they are. But this is to say that you cannot simply pretend that they're the sole reason for US demand declines. Demand has declined because of energy price, a growing anchor on the US economic growth - destined to keep the country from serious economic growth until we manage to untangle the economy from those same energy prices.
Oil prices rise higher than an economy can support, demand drops, oil prices slide, repeat. The scary part about this cycle, the Peak Oil part, is the fact that there's a Goldilocks zone of oil prices, a zone of "not to high, but not to low" that gets smaller everyday. The higher average price, the more likely they hit that too high point for the economy, but modern more-expensive oil projects require high prices for profitable production. Prices too high, economy suffers. Prices too low, projects suffer and you run into supply problems.
How long the economy will be able to handle this delicate price dance is a key question.
The final point: Don't confuse efficiency for conservation. Efficiency is doing what you've always done, but in a more efficient manner. Conservation implies actual behavior change. US oil demand destruction comes from two sources, efficiency and price rationing. US politicians haven't had the courage to ask the public to undertake true oil conservation in decades.
